It is also possible that the plan is underfunded at this time, and is not permitted to make lump sum distributions. The Pension Benefit Guarantee Corporation (PBGC) places restrictions on the ability of defined benefit pension plans to make lump sum distributions if the pension fund is less than 80% funded. Your plan administrator would be able to tell you if this is the case.
Sometimes there are provisions that if you reach a certain age, that you cannot take the lump sum options. The answer will be in your plan document. I would recommend that you request from the ACSC plan administrator (the ACSC retirement manager) the Plan Document and take that to a local financial advisor (this site is a good place to search) and have them review it to see what your options are.
Perwez, it is possible that there was a window in 2010 where you could have taken a lump sum distribution and that window has passed. Perhaps they were changing plans or some sort of liquidation. Perhaps it was on the form, but somewhere in the fine print, you were ineligible, or some other reason.
As Michael suggests, the answer as to whether or not you can take a lump sum distribution lies in the plan document. We are all assuming that this is a defined benefit, or pension plan, where, as the name implies, the benefit is a defined periodic payment. On this type of plan, a lump sum distribution needs to be specified in the plan document.
Every plan has a plan administrator, who, again, as the name implies, administers the plan. I am unclear as to whether your ACSC retirement manager is in HR or is actually the plan administrator, but I would go to the plan administrator. There you should be able to get answers to your questions. You should be asking 'can I get a lump sum distribution now, can I get one at some point in the future', 'and why was I offered one in 2010?'.
The intent of all corporate retirement plans is to provide income at retirement. So, I am hoping that even though it may be a relatively small amount, that you plan to roll it into an IRA. If you can get a lump sum distribution, and the check is directly to you, you will pay income tax, plus a 10% penalty if you are under age 55. So depending on your current tax bracket, your $10,000 will quickly turn into $6000 or $7000. If you roll it into an IRA, it will continue to grow tax-deferred.
Assuming that you cannot take the lump sum distribution, that small amount of monthly premium they will offer you in retirement is for life. It does not sound sexy at all, but the older you are, the more it will benefit you. Seek advice from a CFP(R) or other financial planner. You really should have some direction with an overall financial plan.
That seems like quite a long time to finally hear back from them over a year later that you don't have a lump sum option. I would dig a little deeper and try to figure out the specific provisions in the plan document as Michael suggested above.
Have you asked their manager why you are no longer eligible for a lump sum? I would see what their response is to that question also.